03-01-07

SAN JOSE, Calif. — Based on a record setting level of new fabs coming online in 2007, Strategic Marketing Associates Inc. (SMA) expects capital spending to hit $60 billion in 2007.

''This will be the second highest level of spending in the history of the industry,'' said George Burns, president of market research firm SMA (San Luis Obispo, Calif.).

SMA expects 29 fabs to come online and begin volume production this year. The value of these fabs when fully equipped will exceed $44 billion.

As many as nine new DRAM fabs will come online in 2007. ''Companies like Powerchip, TECH Semiconductor, ProMOS, Samsung, Nanya, Inotera Hynix, and Winbond will all bring new DRAM fabs online,'' Burns said in a statement.

Burns expects that $8.5 billion of new microprocessor fabs by Intel and AMD will also come online in 2007, as well as $4.5 billion of new flashmemory fabs. ''Add in almost $4 billion of new foundry fabs,'' Burns said, ''and its almost inevitable that capital spending will grow this year.''

''Already companies like Micron, AMD, TSMC, SanDisk, Inotera and ProMOS have indicated that they will be budget more in 2007 than in 2006,'' according to Burns.